Glossary
Adjusting entry
An adjusting entry is added at the end of a period to record an expense or revenue that belongs to the period but is not yet recorded.
What it means for a shop owner
Examples are monthly depreciation and rent due but not yet paid. It makes the profit report honest for the period. Make it before closing the books, not after.
A worked example
A month rent of 600 has not yet been paid. At month end you record 600 of rent expense against a 600 liability.
Related
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